Mark Hirschey Managerial Economics 11th edition.
Problem 1: "When I go to the grocery store, I find cents-off coupons totally annoying. Why can't they just cut the price and do away with the clutter?" Discuss this statement and explain why coupon promotions are an effective means of promotion for grocery retailers, and popular with many consumers.
Problem 2: An estimated 80 percent increase in the retail price of cigarettes is necessary to cause a 30 percent drop in the number of cigarettes sold. Would such a price increase help or hurt tobacco industry profits? What would be the likely effect on industry profits if this price boost was simply caused by a $1.50 per pack increase in cigarette excise taxes?